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Portugal seeing property prices and rents continuing to increase

Tuesday 1st May 2018

Written by Mark Burns, Hopwood House

Following the release of figures from a recent index, it is known that Portugal is experiencing continued growth to its property prices, as well as the rental income that landlords can achieve. This growth is expected to continue, with an anticipated growth of 4.5% over the next year, whilst that figure is expected to grow to an average of 5.5% a year over the next five years. 
As a national average, property prices grew by 12.8% in 2017, whilst Lisbon actually saw prices increase by more than 21%, a figure which has doubled since 2013. Experts also suggest that Porto will see very strong price growth over the next year, and there are big expectations for the Algarve, with a strong five years of growth anticipated.
Portugal property market performance
In Portugal, there is a big lack of supply and a growing demand where property is concerned. With this difference between supply and demand of property, the prices of property and rents are both increasing. Demand for property from new buyers increased once again in February 2018, reflecting a continued increase to the demand for the property, and although sales increased slightly again in February, there wasn’t as much of an impact as the previous month.
As well as this, instructions to sell again decreased, with this avenue of supply of property to the market now having remained in the negative for almost a year now. The report also suggests that house price inflation picked up in the latest figures, with the price growth gauge displaying a net balance of +52%, of which is the second strongest reading since 2010, when the survey began.
The director of Ci, Ricardo Guimaraes, said: ‘Top markets see new records every quarter and the most expensive prices previously have become just averages in the present. These quick changes have raised concerns for some respondents about developers and buyers operating in secondary locations, where prices might become unaffordable relative to local rationales.’
Investors delight in Portugal
Portugal seems to be a country on the rise once again, with more aspects of the country seeing growth and improvement when compared to previous years. The Portuguese economy is improving in more ways than one, and Simon Rubinsohn, chief economist at RICS, said: ‘Indeed, employment and household incomes are rising, consumer confidence remains elevated, and credit conditions have eased further over recent months. Given this, the outlook for housing market activity appears solid as we move through 2018.’
With a combination of strong performance where property prices and rents are concerned, and a continuously improving Portuguese economy with relevance to the property market, Portugal is again attracting the interest of investors from around the world. Many areas of Portugal possess unrivalled beauty, and the desire to be in Portugal has never been doubted, so with such positivity surrounding the market, investors are sure to consider Portugal as their next investment location.
For more information or to browse a range of properties for sale in Portugal, please contact Hopwood House.

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